The Gender Gap in Pensions: Differences Between Generations

Carole Bonnet, Sophie Buffeteau et Pascal Godefroy

Over successive generations, women's participation in the labour market has risen
and their career breks have become less frequent, leading to an increase in the number
of their years of contributions to retirement schemes. At the same time, men's participation
in the labour market has decreased. Furthermore, the gender wage gap has narrowed,
due largely to a rise in women's level of education. During the same period, the time
spent in education has increased, so that the age at which women and men enter the
labour market has risen.
For future generations, these socio-economic factors are expected to continue to reduce
gender differentials in pension level and retirement ages. Nonetheless, simulations
carried out using the Destinie model indicate that the gender pension gap should remain
significant. On average, men of the 1965-1974 generations retiring from the private
sector should receive a pension than is more than 50% higher than women's. Although
women are expected to participate more in the labour market, their participation rate
should still be lower than men's. Furthermore, women often work part-time and the
gender wage gap is expected to remain significant. Changes in retirement system rules
will influence futire trends in pension levels. The gap between women's and men's
pensions would have narrowed much more in future if the 1993 and 2003 reforms had
not been implemented.
Men's and women's retirement age would expect to converge. Since people will probably
finish their studies later and more years of contributions will be required, the average
age of retirement should rise. However, this trend should be more or less completely
offset for women by the trend toward a lengthening of their working lives. Moreover,
the reduction of the penalties for early retirement introduced by the 2003 reform
could encourage some women not in the workforce to retire earlier.